Drums Keep Pounding A Rhythm To The Brain (Beat Goes On by Sonny Bono)
For the most part, everyone in my Economic Modern Family kept their seats in the minivan. Transportation (IYT) though, forced Grandpa Russell 2000s (IWM) to apply the brakes deactivating the cruise control as IYT threatened to hitchhike home.
This got Grandma Retail (XRT) angry, so she jumped out of the van, managed to convince IYT to get back in, with the threat that if Grandpa IWM doesn’t drive faster, she’ll bale along with IYT!
Meanwhile, Semiconductors (SMH) said, ”Hey, what about me? Haven’t I done enough for you all?” That got Biotechnology (IBB) all up in a knot so he decided to stay in the van, but not allow it to move above and beyond the mileage he put on the day prior (inside day).
Regional Banks (KRE) was all like, “Dudes, if you all cannot decide whether we are taking this trip to the mountains or not, I will sit idly by just like Big Bro IBB.” (Another inside day.)
Dow (DIA), not part of the immediate family but definitely a second cousin, posted a second inside day. That’s rare for an index and sends a message to his relatives that if they cannot bust a move-he will just sit on the dock of the bay wasting time.
The plot thickened as to prevent the 2 inside days in the DIA from feeling lonely, IWM, SPY and QQQs stood in solidarity and also traded inside the range of the prior day.
Back at the sheep pasture, the sheep sprinters that busted out of the gate Thursday were 3-D printing (DDD), GoPro Inc (GPRO) and Palo-Alto Networks (PANW) all up 5%+. The sheared sheep that headed for slaughter-Terex Corp (TEX), down nearly 8%.
And The Range (Beat) Goes On. The Range Goes On!
S&P 500 (SPY) Inside day. Looking at 213.78, the 2015 high as the point to clear. Subscribers: Positive Pivots in all except DIA
Russell 2000 (IWM) Inside day. Confirmed Bullish Phase
Dow (DIA) 2 Inside days! 182 resistance to clear
Nasdaq (QQQ) Inside day after trading within 8 cents of negating the possible double top pattern we began this week concerned with.
XLF (Financials) Inside day with 24.90 the next point to clear and 24.45 point to hold
KRE (Regional Banks) There is a reason this is in the Economic Modern Family. Remains one of my favorite sectors-active model has been holding since February
SMH (Semiconductors) New high and pause
IYT (Transportation) New 60+ day low but recovered some from there. If week ends over 151.60 a good sign
IBB (Biotechnology) Inside day. 370 next hurdle
XRT (Retail) Range to break 99.70 upside, 98.00 downside
IYR (Real Estate) Under the 200 DMA-over 76.20 clears it
GLD (Gold Trust) Over 115 better if holds 114
USO (US Oil Fund) Held 19.05, the 50 DMA and rallied-interesting
XOP (Oil and Gas Exploration) Broke the giant bear flag
TAN (Guggenheim Solar Energy) Held 41.90. Like better over 43.50
TLT (iShares 20+ Year Treasuries) 124 the 200 DMA and 120.25 support
UUP (Dollar Bull) The 50 DMA at 25.50
Longs: On categories: Gap higher days we go to all categories and choose ones with lowest risk that break the opening range. On weaker days, we look at Category 3, especially if the picks hold S1, previous day lows or a major moving average and have a good risk on the reversal. The difference between Category 1 and 2 is the stock condition-a Condition 1 is strongest stock and more likely to make a parabolic move.
Note: Anything that is on this list is a candidate for a swing trade-(of course market condition is a factor) -use the max risk mentioned along with an opening range stop using fudge factor and time confirms. I suggest you decide on 1 or 2 that have a risk you like and then position size accordingly
***Market Tone: Short-term Positive 1, Intermediate-Term Positive 6, and Long-Term Positive 8. NOTE: Market Tone is updated before the open each day and reported to you on twitter.
Category 1: N/A
Category 2: (Pipeline) Positive Phase, Condition 2-3, 2 days under the FTPs, Risk to Previous day low, Can buy ½ over FTP and ½ over R1, Target- Day to at least 3 ATRs from entry:
PNRA Inside day and 6 days under pivots. 180 support to hold and over 184.55 clears R1. Best to wait for a 5 or 30 minute OR mini to swing. Can do ½ over pivots ½ over R1
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means can either buy an opening range breakout or candidate for Opening Range Reversal, with Risk S1 or previous day low, whichever is lower unless noted differently, Target- Day to at least 3 ATRs from entry: (Opening range reversals are good on anything above S1)
BKD If holds 37.25, max risk, like for a mini to hybrid swing. Any OR
KMX 72.15 good tight risk. Over 73.20 clears some congestion. Any OR Like best for mini
AAPL 2 Inside days. Should hold 130.50 and clear 132.11 R1 and today’s high. Day to mini Any OR
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
PSX Not oversold bud did have a good pop back over the 50 DMA. Over R1 now best or 80.17 with max risk 78 closer 79.40
Phase Change:
SODA Still like this now over 21.75 but risk can vary. Day risk would be 21.30 mini would be more like today’s low and swing, 20.12. Any OR
ONVO Would probably wait for an ORR but like the action and needs to hold 4.50 now.
DLR Had a brick wall late April. Has to close over 66.72 to confirm a phase change. Otherwise, has to hold 66.10. Any OR Day to swing
X Over the 50 DMA at 24.93. Like risk to 24.24 for mini or under 23.20 for swing Any OR
Reversal Trades: N/A
Shorts:
Category 5: N/A
Category 6: White Cap-Having a 2-3 Day correction over the pivots. In a Negative Phase, Positive Pivots. Can sell an Opening Range High Failure if happens below R1 or previous day high whatever is higher and/or weakness if breaks S1 and prior day’s low
DKS 54.46 max risk or R1 whichever is closer to the highs. Has to break S1 53.74 on weakness only Day to mini
